DynaMotive Continues Its International Expansion Through Australian Master License; Two 200 Tonnes Per Day BioOil Plants Under Review; Company Provides Update on Consensus Joint Ventures

July 10, 2006--DynaMotive Energy Systems Corporation (OTCBB:DYMTF) announced it has entered into a master license agreement with Enecon Pyrolysis Pty Ltd. (EPPL), a company with extensive energy operations in Australia. Enecon Pyrolysis Pty Ltd was set up by the directors of the Enecon Group to take a dedicated role in the commercialization of biomass pyrolysis in Australia. The agreement follows a stringent due diligence process by Enecon where a number of pyrolysis technologies world-wide were reviewed. The selection of DynaMotive Energy Systems as their preferred technology further confirms the leadership position of DynaMotive in the sector.
EPPL intends to establish the first biomass to BioOil business in Australia and will hold the exclusive License for DynaMotive's pyrolysis technology in the country. Subject to the terms of the master license agreement, EPPL has 90 days to comply with certain performance criteria in order to confirm its exclusivity.
EPPL will market DynaMotive's technology and develop and operate facilities in Australia. DynaMotive will receive a fee for the master license and license fees for each plant developed in the territory, as well as royalties from the output of those plants.
"The master license agreement with Enecon is the second territorial license granted this year, the first being Rika Ltd., based in Latvia, for marketing in Ukraine and Baltic States," stated Andrew Kingston, President and CEO of DynaMotive. "Territorial licenses provide a win-win situation, accelerate market penetration and drive revenues. We provide access to our technology and our partners provide high-level local capabilities. DynaMotive looks forward to working with Enecon in their development of a pyrolysis business in Australia."
Enecon's Managing Director, Colin Stucley, commented, "DynaMotive has demonstrated its technology at commercial scale and has successfully pyrolyzed a wide range of feedstocks (140+). This existing experience, together with the commercial plants currently under design and fabrication for sites in Canada, means that DynaMotive can provide us with very strong technical and operational support for our developments in Australia. Importantly for us, DynaMotive's executive team is completely committed to growth in the use of its renewable energy technology and is most supportive of our own endeavours."
The master license agreement contemplates the development by Enecon, or through sub-licensees, of multiple projects with comprehensive support from DynaMotive and its partners. Enecon's business plan envisages the construction of at least one project within the first twelve months, in addition to undertaking preliminary work on several other projects.
Enecon has screened a number of opportunities for biomass pyrolysis and has identified two initial projects that potentially offer attractive financial returns. Biomass feed and energy users have been identified and talks are ongoing.
In these proposed development projects, the power generated via the BioOil may be sold at a premium over grid electricity due to the remote location of end-users.
Update on Joint Ventures with Consensus
DynaMotive also announced today that it has concluded agreements with Consensus Business Group ("CBG") of the UK and confirmed funding for two joint venture companies. One company, DynaMotive Europe Limited, will be owned 80% by DynaMotive and will focus on European business development activities. It will be funded, indirectly, by a US$2 million CBG investment in DynaMotive equity (completed) and DynaMotive will receive a 20% participation in CBG profits from financing of related opportunities.
The second company (newly formed) will be owned 51% by DynaMotive and will focus on biomass opportunities. It will be funded by a US$2 million direct investment from CBG (US$0.5 million completed) and a US$0.5 million investment by DynaMotive and a US$1 million loan from DynaMotive. The biomass company will in turn acquire certain biomass development rights from DynaMotive for US$1.5 million. No technology rights are included in these agreements and any projects developed will be developed under standard license agreements.
About Enecon
Enecon has worked continuously on bioenergy studies and projects around Australia since its foundation in 1998. In particular, Enecon has worked closely with Western Power Corporation, the Oil Mallee Company and others to scope, design and build a unique multi-million dollar plant that uses Enecon's patented fluid bed combustion and activation technology to produce activated carbon plus eucalyptus oil and renewable electricity from mallee eucalypt trees. Enecon won energy and environment awards from the Institution of Chemical Engineers UK and Rabobank/Monash University for the original plant concept and initial development. The demonstration plant received financial support from the Australian Greenhouse Office, Ausindustry and the NHT.
About Consensus Business Group
Consensus Business Group is a multi-faceted principal investor in a broad range of synergistic activities, including structured finance, the acquisition, management and development of commercial/residential real estate and high tech start-ups.
About DynaMotive
DynaMotive's BioOil is produced using patented technology that converts forest and agricultural wastes such as bark, sawdust and sugar cane bagasse into a liquid fuel. Unlike fossil fuels, BioOil is renewable, clean burning, low in emissions and is greenhouse gas neutral. As a clean fuel for power generation in gas turbines, diesel engines and boilers, BioOil presents significant market opportunities. The Company and its partners are also engaged in research and development on a range of derivative products that will further enhance the market and value for BioOil as an alternative fuel and product source.
Forward-Looking Statement